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Bacanora lithium project unlikely to be hit by Mexico nationalization

Bnamericas Published: Tuesday, March 30, 2021
Bacanora lithium project unlikely to be hit by Mexico nationalization

Bacanora Lithium signaled that its Sonora project is unlikely to be affected by a proposed nationalization of Mexico’s lithium industry.

President Andrés Manuel López Obrador (AMLO), who has ordered an evaluation of the proposal, has said he will respect existing mining concessions, a spokesperson for Bacanora was quoted as saying by local financial daily El Economista.

The company already has concessions in place at Sonora, Mexico’s largest and most advanced lithium project.

Large lithium projects will require billions of dollars to develop, Bacanora added. With the fallout from the COVID-19 pandemic weighing on the economy, the government has many other pressing spending priorities.

Lithium mining also requires technical knowledge, with Bacanora benefiting from the expertise of 50:50 JV partner Ganfeng Lithium.

Novel technology provided by the Chinese firm will play a key role in Sonora’s economic viability, the company said.

Senator Alejandro Armenta, of the ruling Morena party, presented a bill in November calling for the battery metal to be deemed the exclusive property of the nation, with production controlled by the state.

The aim of the move – which has been criticized by mining industry officials – is to ensure Mexico gains the maximum benefit from its lithium resources, with demand expected to surge amid an electric vehicle boom in the coming years.

Mexico is not a lithium producer, but this is expected to change in 2023 when the US$420mn Sonora project begins production at 17,500t/y lithium carbonate, rising to 35,000t/y in a second stage expansion.

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